TMI Blog2021 (12) TMI 1087X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act - when the picture tube in a television set is replaced, such repairs would come within the connotation of the phrase current repairs thus, the claim being considered as current repairs, the same would fall under Section 31 of the Act as current repairs - Decided against revenue. - T.C.A.No.718 of 2009 - - - Dated:- 30-11-2021 - THE HON'BLE MR. JUSTICE R. MAHADEVAN AND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ For Appellant : Mr.M.Swaminathan, Senior Standing Counsel assisted by Mrs.S.Premalatha, Junior Standing Counsel For Respondent : Mr.R.Venkatanarayanan And M/s.Subbaraya Iyer JUDGMENT R.MAHADEVAN, J. This tax case appeal filed at the instance of the Revenue, calling in question the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epairs under Section 31 of the Act. The Assessing officer, however, rejected the contention of the assessee and the Assessing Officer pointed out that the assessee was claiming depreciation upto 1999-2000 under Section 32 of the Act and only in the year under consideration, it started claiming deduction under Section 31 of the Act. The Tribunal pointed out that the dies and moulds were not plant and machinery, yet the replacement of dies and moulds were not in the nature of installation of machinery in the factory. Such moulds and dies were normally attached to the machines to suit the individual requirement of particular product. So holding, the Tribunal held that expenditure incurred on replacement of dies and moulds was revenue in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 10. The question as to whether the expenditure incurred on replacement of machinery is revenue or capital expenditure, particularly in the nature of replacements of parts, thus rests on the nature of expenditure incurred, vis-a-vis the benefit that the assessee derives. The ratio deductible from the decisions referred to above are: (i) To decide the applicability of Section 31(i), the test is not whether the expenditure is revenue or capital in nature, but whether the expenditure is current repairs . The basic test is to find out whether expenditure is incurred to preserve and maintain an already existing asset and the expenditure must not be to bring a new asset into existence or to obtain a new advantage vide [2007] 293 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red during the current accounting year and (d) is incurred wholly and exclusively for the purpose of the business. - 2009- TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited); (vi) Expenditure is of a capital nature when it amounts to an enduring advantage for the business and repair is different from bringing a new asset for the business. Further, bringing into existence a new asset or an enduring benefit for the assessee amounts to capital expenditure vide Lakshmiji Sugar Mills (P) Co. v. CIT (AIR 1972 SC 159) referred in 2009-TIOL-86-SC-II (CIT Vs. Sri Mangayarkarasi Mills P. Limited). (vii) Therefore, whether an expenditure is revenue or capital in nature would depend on the facts of each case. - [2007] 293 ITR 201 (SC) (C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in rejecting a contention raised by the assessee, the grant of relief to an assessee is justified on another ground, the Revenue is bound to consider such claim of granting the relief. The Apex Court pointed out that the right of the assessee to the relief is not restricted to the plea raised by him. On the facts before us, when the dies and moulds were attached to the machine to manufacture the designed product, we have no hesitation to accept the plea of the assessee that the claim would fall for consideration only under Section 31 of the Act. 32. In the unreported decision of this Court dated 27.04.2012 in Tax Case (Appeal).No.1011 of 2005 (The Commissioner of Income Tax, Madurai Vs. M/s.Machado Sons) on the question of repair made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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